Amid the extended crypto bear market, monitoring whale activity of assets like Bitcoin (BTC) has become a crucial metric for finding clues to the next potential price action.
In this regard, Bitcoin’s on-chain whale activity has slowed for the past few weeks as BTC price consolidates around the $20,000 mark.
Specifically, 100 BTC bitcoin-whale transactions stood at 106 on Oct. 23, down about 86% from the 813 transactions recorded on July 25, according to DataPool data.
Implication of deleting whale transactions
It’s worth noting that most bitcoin whale transactions are usually responsible for sudden price swings in the crypto space. Fluctuating whale activity indicates a possible bullish or bearish price move. In fact, it could also signal market volatility if the number of transactions increases.
Hence the declining bitcoin whale activity has come as the flagship cryptocurrency’s price appeared to stabilize in the $19,000-$20,000 range. As a result, Bitcoin continues to see slowed volatility.
Additionally, analyzing whale activity could provide a clue as to Bitcoin’s next price action. Historically, an increase in bitcoin-whale transactions during times of price declines indicates a possible price bottom, while an increase in such transactions during times of price increases indicates a possible price top.
At the same time, it is important to understand the purpose of whale transactions. In this case, when large amounts of bitcoin are deposited into an exchange, it signals that a whale or wealthy investor is planning to sell bitcoin and potentially profit.
Additionally, the drop in transactions can be interpreted as increased HODLing activity, with sophisticated investors preferring to store their loot in cold wallets off exchanges.
Bitcoin’s potential breakout
Overall, amid prevailing macroeconomic factors, Bitcoin continues to look for potential rally triggers. As reported by Finbold, crypto trading expert Michaël van de Poppe has hinted that a Bitcoin breakout could occur in the coming week, with several macroeconomic events acting as key catalysts.
For example, Poppe suggested that US Treasury Secretary Janet Yellen’s upcoming speech could affect returns and consequently put assets like Bitcoin at risk.
Disclaimer: The content of this website should not be construed as investment advice. Investing is speculative. When investing, your capital is at risk.
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